Metsä Group’s operating result for 2013 excluding non-recurring items was EUR 342 million

February 06, 2014 05:01 ET | Source:Metsäliitto Osuuskunta

multilang-release

Metsä Group Stock Exchange Release 6 February 2014 at noon

Full year result for 2013– Sales amounted to EUR 4,932 million (2012: EUR 5,001 million).– Operating result excluding non-recurring items was EUR 342 million (256). Operating result including non-recurring items was EUR 334 million (241).– Result before taxes excluding non-recurring items was EUR 232 million (147). Including non-recurring items, the result before taxes was EUR 224 million (133).– Return on capital employed excluding non-recurring items was 9.1 per cent (7.1).– Cash flow from operations amounted to EUR 488 million (444).

Result for October–December 2013–Sales amounted to EUR 1,217 million (10–12/2012: EUR 1,228 million).– Operating result excluding non-recurring items was EUR 87 million (71). Operating result including non-recurring items was EUR 88 million (77).– Result before taxes and excluding non-recurring items was EUR 60 million (42). Result before taxes including non-recurring items was EUR 61 million (48).– Return on capital employed excluding non-recurring items was 9.3 per cent (7.3).

Events during the fourth quarter of 2013– Sales and production of pulp continued to be strong.
– Delivery volumes of paperboard decreased from the previous quarter mainly due to seasonal reasons. Delivery volumes of paper were approximately on a par with the previous quarter.– Negotiations on folding boxboard price increases in Europe were completed, and contract prices will increase slightly in 2014.– Metsä Wood discontinued the operations of the upgrading and distribution unit in Kaskinen, Finland.– Metsäliitto Cooperative signed a syndicated credit facilities agreement of EUR 400 million.

Events after the period– Metsäliitto Cooperative increased its shareholding in Metsä Tissue in a share transaction on 15 January 2014. The shares represented a total of 6 per cent of the share capital of the company. After the transaction, Metsäliitto Cooperative owns a total of 91 per cent of Metsä Tissue.
– Metsäliitto Cooperative, Metsä Group's parent company, celebrated its 80th anniversary on 23 January 2014.

"Metsä Group's full-year operating result improved clearly, while sales remained at the previous year's level. During the past year, we have decreased our net debt, and our equity ratio has improved as planned. Considering the prevailing market conditions, we can also be satisfied with the return on capital employed.

Our focused strategy is working well. As a producer of pulp and board, we are among the international leaders. Our strong brand products in tissue and cooking papers match the growing demand well, and the refocused strategy of wood products industry lays a solid foundation for the business area in the future. Our businesses are supported by efficient wood supply, guaranteeing a steady flow of raw material to our mills.

Metsä Group is confident about the future. The high-quality raw material acquired from owner-members, state-of-the-art production units, skilled employees and ecological products will continue to be our competitive advantages."

Kari Jordan, President & CEO, Metsä Group

Metsä Group

Income statement, EUR millionThe figures for 2012 are restated

20131–12

20121–12

201310–12

201210–12

Sales

4 931.6

5 001.0

1 216.9

1 228.0

Other operating income

81.2

76.8

25.0

25.3

Operating expenses

-4 423.2

-4 587.2

-1 093.5

-1 123.7

Depreciation and impairment losses

-255.1

-249.1

-60.9

-52.5

Operating result

334.4

241.5

87.6

77.2

Share of profit from associates

9.7

4.8

0.5

-0.3

Exchange gains and losses

-4.6

2.4

-2.6

1.1

Other net financial items

-115.9

-115.5

-24.1

-30.3

Result before income tax

223.7

133.2

61.3

47.7

Income taxes

-35.1

-31.8

10.3

2.0

Result for the period

188.7

101.4

71.6

49.7

ProfitabilityThe figures for 2012 are restated

20131–12

20121–12

201310–12

201210–12

Operating result, EUR mill.

334.4

241.5

87.6

77.2

- “ -, excluding non-recurring items

342.3

255.7

86.6

71.0

- “ - % of sales

6.9

5.1

7.1

5.8

Return on capital employed, %

8.9

6.7

9.4

8.0

- ” -, excluding non-recurring items

9.1

7.1

9.3

7.3

Return on equity, %

9.9

6.1

14.9

10.8

- ” -, excluding non-recurring items

10.3

6.9

14.7

9.4

Financial positionThe figures for 2012 are restated

201331.12.

201231.12.

201330.9.

201230.9.

Equity ratio, %

38.1

34.8

36.1

34.2

Net gearing ratio, %

76

86

84

90

Interest-bearing net liabilities, EUR mill.

1 486

1 590

1 583

1 648

Segments

Sales and Operating resultJanuary–December 2013(EUR mill.)

Wood Supply& Forest Services

WoodProducts Industry

PulpIndustry

Paperboardand Paper Industry

Tissue and Cooking Papers

Sales

1 561.0

897.0

1 313.8

2 019.3

1 000.1

Other operating income

9.3

9.8

18.6

53.0

6.0

Operating expenses

-1 539.6

-872.0

-1 075.8

-1 857.5

-911.4

Depreciation & impairment losses

-2.8

-36.9

-59.9

-101.3

-39.7

Operating result

27.8

-2.1

196.6

113.6

55.1

Non-recurring items

-

17.2

-

-9.2

-0.6

Operating result, excl. non-rec. items

27.8

15.1

196.6

104.4

54.5

- % of sales

1.8

1.7

15.0

5.2

5.4

Near-term outlook

The wood orders of Metsä Forest’s customers for 2014 are at a normal level. The demand for wood continues to be steady for all timber grades.

The demand for wood products will continue to be stable within the normal seasonal fluctuation range. The industrial and sawn timber product market is expected to be reasonably balanced during the first quarter. However, the outlook for construction and upgrading business is challenging in large part of the main market areas.

The start-up of competitors' new short-fibre pulp mills in South America and increasing production volumes during the first two quarters will have a substantial impact on the pulp market. On the other hand, the favourable development is supported by the low levels of softwood pulp suppliers’ stock, delays in additional capacity projects and China’s investments in tissue paper and board production capacity. The Asian market will become even more important to Metsä Fibre.

The delivery volumes of folding boxboard and white-top kraftliner are expected to increase slightly during the first quarter of 2014. Metsä Board increased the prices of folding boxboard in Europe during the fourth quarter of 2013, but no significant changes in the average price of white-top kraftliner are expected in the near future.

Delivery volumes of uncoated fine paper and coated papers are expected to be approximately at the previous quarter's level in the first quarter of 2014. Still no significant changes in paper prices are expected.

The demand for tissue and cooking papers is expected to continue its favourable development. However, changes in the prices of energy and raw materials will have a significant effect on the development of the company's operating result. These costs increasing and the local availability, quality and price of recycled paper will present significant challenges in 2014.

Metsä Group's operating result excluding non-recurring items in the first quarter of 2014 is expected to slightly improve from the fourth quarter of 2013.

Disclosure procedureMetsä Group has adopted a disclosure procedure made possible by the Financial Supervision Authority Standard 5.2b. This bulletin is a summary of Metsä Group's Financial Statement Bulletin for 2013. The Financial Statement Bulletin and its tables are attached to this Stock Exchange Release as a PDF attachment and are available on the Group’s website at www.metsagroup.com.

Metsä Group is a responsible forest industry group whose products’ main raw material is renewable and sustainably grown Northern wood. Metsä Group focuses on tissue and cooking papers, consumer packaging paperboards, pulp, wood products, and wood supply and forest services. Its high-quality products combine renewable raw materials, customer-orientation, sustainable development and innovation. Metsä Group’s sales totalled EUR 4.9 billion in 2013, and it employs approximately 11,000 people. The Group operates in some 30 countries. Metsäliitto Cooperative is the parent company of Metsä Group and is owned by approximately 123,000 Finnish forest owners.

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